EU Opens Proceedings Against German Energy Rebates

13.02.2014 -

As expected, the European Commission has opened proceedings against Germany for granting special privileges to energy-intensive companies under the renewable energy act (EEG) and ordered that the federal government end the rebates by Dec. 18, 2014.

Under the German regulations, companies with high energy costs are exempted from a large proportion of the levies on utility bills to support renewable energy. This also includes firms generating their own on-site energy.

Currently, around 2,000 companies, including many in the chemical industry, profit from the regulations, thereby collectively saving an estimated €500 billion annually.

The country's new economics minister, the Social Democrat Sigmar Gabriel, has said in the past that German industry stands to lose competitiveness if required to pay the full renewables levy. However, in a meeting with the minister on Feb. 11, industry representatives said he had offered no concessions to affected companies.

According to the German Federal Office of Economics and Export Control, 2,098 companies will profit from the energy rebates in 2014, some 378 more than in 2013.

The German chemical industry association, VCI, has called on the government to scale back its aid to renewables, saying that the targets have been more than met, while at the same time the security of energy supply is threatened and costs are exploding.